Partners must look to sustainability to boost their businesses
Thursday, April 08 2021
In the past decade, technology vendors have been increasing sustainability targets across environmental and social metrics. Technology channel partners, for the most part, have not. Many smaller IT partners don’t have the resources to design sustainability programs, or customers demanding sustainable practices. Meanwhile, technology companies have larger environmental footprints so the pressure to act is greater. But this situation is changing rapidly.
The top three motivators for sustainable practices
The adoption of sustainable practices is fueled by three main drivers, and all three are likely to intensify in the coming years. The first driver is corporate responsibility. Positive environmental and social change is the right thing to do, and a corporate entity has (or can acquire) the tools to make that change happen. From climate change to social change, corporations are increasingly being held accountable, taking stances and making those stances public. Positive change has a trickle-down effect, with benefits such as attracting workforce talent and enhancing brand image. Vendors are embracing the marketing benefits and are eager to align partners to their own sustainability goals. This often results in the provision of consulting tools and other assets to support their partners.
The second driver is customers, who can drive sustainability by asking for it. The public sector has emerged as a notable example. Over the last few years, governments have been key advocates for selecting technology providers based on them meeting sustainability requirements. This practice is expected to expand more broadly to other sectors as sustainability becomes a contractual requirement in supply chains. Though essential cost-cutting during the pandemic has put some customers’ interests in sustainability on the back burner, momentum is likely to return with increasing economic stability.
The last motivation is regulation, which is already solidified in many countries and is likely to increase in the coming years. The Paris Agreement is tying countries together on this front with legally binding commitments to set climate targets and regularly increase the ambition of those targets. Currently, more than 25 countries, including the US, have agreed to net zero emissions goals, and 100 more have expressed similar intentions. Beyond the environmental targets, the Paris Agreement was also one of the initial drivers of environmental, social and corporate governance (ESG) demands from investors, employees and customers alike. In the coming years, countries’ environmental targets and corporate ESG targets will be foundations for regulatory action.
Not all partners are behind on ESG
Some partners have taken action to build ESG concerns into their business practices. The result is a wide variety of innovation that brings benefits across the board, from cheaper utility bills to stronger relationships with their communities. CDW for example, has used the ESG framework to formalize sustainability actions across its business.
On the social front, CDW formulated its Robust Business Groups program, featuring global groups such as BeU (Black Excellence Unlimited), BRAVE (Business Resource Alliance Valuing Equality) and HOLA (Hispanic Organization for Leadership and Achievement). These groups work to foster inclusive culture across social groups, while also bringing productive content forward within CDW. This movement for a strong internal culture has a ripple effect, particularly in CDW’s supplier diversity program, which increases procurement opportunities for minority-owned, women-owned, veteran-owned and disabled-owned businesses. CDW topped US$1 billion spent in 2019 with historically disadvantaged vendors and suppliers, and along with other initiatives this brought CDW recognition from Forbes as one of America’s Best Employers for Diversity 2020.
CDW has also made progress on the environmental side, especially with its 11-year-old beGreen program, which was designed for employees to collaborate and incorporate sustainable principles into the company. The overarching goal is to increase employee education while implementing resource conservation. Through the beGreen program, CDW has employed third parties to help measure paper consumption and forest impact. It has also upgraded offices and distribution centers with climate control systems, tankless water heaters and energy efficient lights with motion sensors. These examples reflect CDW’s efforts to get data where it doesn’t have it, and then take action, with many small steps growing to have a big impact. Notably, CDW is a large Fortune 500 company with about 10,000 employees, a large footprint of warehouses and infrastructure, and is responsible for a high volume of product sales. Therefore, the pressure to make changes is great.
But sustainability action works for smaller technology partners too, even if scaled down. Introstat, a value-added IT solution provider from South Africa, is taking on this challenge. Introstat has become certified at the highest level for BBBEE (Broad-Based Black Economic Empowerment), a South African government program made to address inequalities by attempting to compensate for land that was taken from native Africans. This means that Introstat has high levels of black and black female ownership, board and leadership positions, as well as skills development for its workforce around bias and social investment initiatives.
It also contributes to circular economies by offering customers the free and environmentally friendly disposal of printer cartridges. Beyond that, it uses HP resources to help customers opt for more efficient devices and reduce the number of printers in use. With a balanced deployment model, a large number of printers can be cut to just a few devices that share large print loads intelligently. These solutions use less power, optimize paper use and ultimately reduce carbon footprints, which can subsequently cut costs.
Though a small partner, Introstat has shown it is a leader in sustainability. In 2020, Introstat received HP’s Sustainable Impact Partner of the Year award as part of HP’s new Amplify Impact program. This program leads the industry in vendor-partner sustainability engagements. Via the Amplify Impact program, HP is launching partner assessments, resources and training programs to support its goal to become the world’s most sustainable technology company by 2030. The program has two tracks, Catalyst and Changemaker, which support partners in pledging to sustainable outcomes and designing long-term plans. Overall, the design follows three pillars similar to ESG, namely Planet, People and Community, and helps HP lead partners with accountability and sustainable outcomes.
The increasing business benefits of sustainable practices
Partners such CDW and Introstat are certainly using the brand benefits that come with ESG principles, and by being proactive they are also prepared for potential regulatory changes that may be introduced in the years to come. But arguably more important are the direct benefits from environmental and social change. Access to ESG resources is improving and increasing the direct benefits of sustainable practices.
Starting with the environment, one vital point to mention is the rapidly falling price of renewable energy. Advances in technology and the prioritization of renewable energy are bringing prices down rapidly, especially solar power. The average prices of major renewable energy sources now make them competitive with fossil fuels.
In the social category, diversity across gender, racial and ethnic groups is shown to create a better business. Diversity and inclusion create healthy workplace dynamics and teams that make better and faster decisions. A diverse workforce can also improve profitability. Though these outcomes are not new, research, tools and training about diversity and inclusion practices are increasingly available.
These are only the tip of the iceberg in terms of benefits, and the opportunity for ESG development is unique to each business plan and strategy. Beyond items such as cost-cutting and marketing traction, ESG initiatives also build relationships with vendors and customers. The process can start small, with easy wins, such as changing air-conditioning filters or launching an anonymous employee feedback survey on an inclusivity topic. Manageable first steps lead to discussion, planning and ultimately large, meaningful and impactful outcomes.
Interested in learning more? Our Canalys-designed channel transformation tool supports vendors to help partners assess their capabilities. Learn more about the Alys tool here or ask us about the Alys Sustainable Channel 360 assessment tool.
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